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- California is offering a new $3,500 instant rebate to first-time electric vehicle buyers.
- Thirteen major automakers, including Ford, GM, and Tesla, have announced their participation in the program.
- The state-level rebate follows the end of the $7,500 federal tax credit under the Trump administration.
Thirteen major automakers have confirmed plans to participate in California’s new $3,500 instant rebate program for new EV buyers, as new electric vehicle prices average nearly $55,000 and the federal government ends the $7,500 tax credit for plug-in vehicles.
California Governor Gavin Newsom (Democratic) announced in a July 16 news release that 13 major automakers have partnered with the Golden State to offer instant rebates to Californians who purchase or lease zero-emission vehicles for the first time, pledging to participate in a new EV rebate program.
Newsom pointed out that the state’s new EV rebate program was introduced after the federal government, at the direction of President Donald Trump, eliminated the common $7,500 tax credit for electric vehicles last year.
“While President Trump hands over the keys to the clean car industry to China, we are showing the world that California is open for business,” Newsom said in a statement. “We are committed to lowering costs for working families and preserving American manufacturing jobs. The future is built in America.”
California’s new EV discounts come from $135 million in state funds included in the recently announced budget deal reached between Newsom and state legislative leaders and later signed into law by the governor. Additional funding for the EV rebate program will come from grants funded by automakers, California officials said.
Which automakers participate in California’s “MyFirstEV” program?
Newsom’s office said the following automakers are participating in the state’s new EV incentive program:
- ford
- general motors
- honda
- hyundai
- come
- clear
- mitsubishi
- nissan
- Rivian
- Subaru
- tesla
- toyota
- volvo
Why is California offering an EV tax rebate?
California’s plan comes nearly two years after President Donald Trump won the 2024 election, when Newsom promised to give consumers an electric vehicle tax credit if Trump followed through on his campaign promise by eliminating the common $7,500 federal tax credit. President Trump passed a bill in Congress that would end the federal tax credit on September 30, 2025.
California has the highest percentage of car buyers choosing electric vehicles.
According to the Washington, D.C.-based Automotive Innovation Alliance, EVs and hybrids accounted for 17.5% of new light vehicle registrations in California in the first quarter of 2026, across most major automakers, the latest data released by the organization. California was the only state with a market share above 20% in 2025.
Automakers have lamented the loss of federal incentives for electric vehicles, and some have cut back on plans to make future electric models in light of changes in federal support for the technology.
California Air Resources Board Chair Lauren Sanchez said in an exclusive interview with USA TODAY in January that the state is stepping up to offer at least some rebates to domestic EV buyers as “the rest of the global market moves toward zero-emission vehicles,” even as federal aid levels have receded under the Trump administration.
EV advocates praise California for stepping in to fill at least some of the violations.
“When Congress repealed federal EV financing, the real threat to auto jobs was an air pocket of demand,” the American EV Jobs Alliance, an advocacy group that works with automakers to push U.S. and state legislatures to adopt EV-friendly policies, said in a statement.
“Weak orders will lead to revisions to production forecasts, which will lead to reassessment of factory investments, which will lead to job cuts,” the group continued in a statement. “California just filled a gap in the market and got automakers to fund half of that.”
Who is eligible for California’s EV rebate?
California’s EV rebate is limited to state residents who have not previously purchased an electric vehicle. The discount is expected to start being offered to car buyers by the end of the summer.
The rebates are available to car buyers of all income levels, but new EVs must cost less than $50,000, according to the law Newsom signed authorizing the rebates. According to the law, the price limit for used EVs is $25,000.
However, there is a big pitfall. California law says there are no price limits on rebates offered on cars made by “California-based zero-emissions vehicle companies,” a big boon for EV makers like Rivian and Lucid. Tesla, the largest electric car maker in the United States, got its start in California, but recently moved its headquarters to Austin, Texas.
How much can I buy a used EV?
Under California’s budget agreement, used EVs are also eligible for a rebate, but buyers will receive only $1,750.
Under the old federal tax credit, used EVs could receive up to $4,000 in tax credits. The used EV tax credit was first added in 2022 by former President Joe Biden’s administration. Previously, only new EVs were eligible for the tax credit.
Can I purchase an EV from outside of California and receive a rebate?
Previous EV rebates in California were limited to residents of the state, and this discount is also limited to residents of the state.
EV shoppers in other states may find solace in the fact that states often copy California’s auto emissions regulations, and some may decide to copy the state’s plan to offer rebates to shoppers. Seventeen states have adopted at least part of California’s clean car regulations in recent years, according to the California Air Resources Board.
The U.S. EV Jobs Alliance said it plans to encourage as many states as possible to follow California’s lead in reinstating EV discounts for first-time EV buyers.
“Thirteen companies have gone on record saying that U.S. EV demand is worth their capital,” the group said. “This is the most useful fact we have for the 2027 legislative session. We are looking to implement this model in other states.”
